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Deferred Costs
 12 Months Ended
Dec. 31, 2018
Deferred Costs [Abstract]  
Deferred Costs

NOTE D – Deferred Costs

Deferred costs consist of costs to obtain customer contracts, such as commissions paid to sales personnel and to third-party partners for customer referrals, and costs to fulfill customer contracts, such as customer implementation costs.

Sales commissions relating to recurring revenues are considered incremental and recoverable costs of obtaining a contract with our customer.  These commissions are calculated based on estimated annual recurring revenue to be generated over the customer’s initial contract year.  These costs are deferred and amortized over the expected period of benefit which we have determined to be two years.  Amortization expense is included in sales and marketing expenses in the accompanying condensed consolidated statements of operations.

The table below presents the activity of deferred costs and amortization of deferred costs (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2018

 

 

2017

 

Balances, at beginning of period

 

$

39,933

 

 

$

32,117

 

Incurred deferred costs

 

 

49,583

 

 

 

44,628

 

Amortized deferred costs

 

 

(44,041

)

 

 

(36,812

)

Balances, at end of period

 

$

45,475

 

 

$

39,933